In the, “Thank you, Captain Obvious” category, a new report released by the Federal Reserve made the startling pronouncement that Americans were poorer as a result of the recent recession and financial crisis. In other news, sticking your hand in water makes it wet. Let’s look at the details. The geniuses at the Central Bank polled 4,000 people and asked questions related to their personal financial changes that occurred as a result of the 2007-2009 time span. They found that 63% of Americans experienced a decline in total wealth. How much of a decline? Here’s where it gets interesting. A 45% decline! We don’t care who you are, that is a significant reduction.
Hello, Houston, we think we’ve found the problem. The financial crisis made Americans poorer. So how does this knowledge help you, the investor, get richer? The answer is simple. As our fearless leader, Jason Hartman, says: Don’t wait to buy real estate; buy real estate and wait. Therein lies the secret. Since you’re reading this blog on the topic of commercial investing, we assume we don’t need to convince you of the wisdom of property investing, but what we would like to remind you of is that when a nation’s wealth is declining, it gets harder to pay bills. One of the biggest bills is a mortgage. Ergo, you have the present foreclosure mess and financial crisis that doesn’t seem to be ready to go away any time soon.
So now we have the scenario that people are being turned out of their houses en masse for failure to make timely mortgage payments. Theoretically, they won’t be living on the streets – at least, all of them won’t. These previous home buyers will become renters on a large scale. Douglas Utberg made the point at the recent Meet the Masters of Income Property Investing educational event, hosted by Platinum Properties Investor Network , that there will be six million more renters in six years than there are today.
If ever there was a flashing neon sign pointing the way to streets paved with gold, this is it. Want to be rich? Buy as many apartment buildings as you can and wait for the flood of renters to come a knocking at your door.
The Commercial Investing Center Team
Flickr / rolandojones